The company has plants in Karnataka and Madhya Pradesh and a grinding unit in Uttar Pradesh.

Mysore Cements plans to set up a greenfield 1.5-mtpa cement plant at Gulbarga in Karnataka, where the prospecting of deposits has been completed and core samples are being analysed.

Rama Newsprint

After acquiring the controlling stake in Rama Newsprint & Papers (RNPL), the SK Bangur group has chalked out plans to infuse a fresh lease of life into the company. The strategy entails expansion of capacity, streamlining operations, reduction in cost and improvement in quality.

RNPLs new promoters, the Bangurs, plan to double capacity to 2.5 lakh tonnes per annum of newsprint, writing and printing paper by installing one more machine within the plant.

The existing two machines will be upgraded with the swing facility allowing production of newsprint or writing and printing paper, as per market demand, said SK Bangur, chairman, RNPL.

Efforts are also on to set up a 25 MW captive power plant adjacent to the companys unit in Gujarat to help reduce the companys power bill by 20-25%. Total investment outlay is estimated to be around Rs 350 crore.

The Bangurs are in talks with overseas consultants and machine suppliers like Swedish firm Metso and Voith of Finland to lend a helping hand in the expansion exercise and cost cutting initiatives.

The company hopes to appoint a consultant shortly. Industry analysts feel the Bangurs may, in the near future, merge RNPL with the group flagship, West Coast Paper Mills (WCPM). Mr Bangur, however, refused to comment on the issue.

Having obtained the approval of the corporate debt restructuring cell for restructuring the Rs 432 crore debt liability and reducing it to Rs 210 crore, the Bangurs are busy addressing issues like mismatch in the companys finance and production. The shortfall in working capital requirements is being met by seeking term loans from lending institutions. Payment to non-CDR members has just been completed after several rounds of discussions, sources said.

Meanwhile, the groups in-house expertise has helped enhance production at RNPLs unit by 25-30% in the last couple of months.

Apart from quality improvement measures, marketing strategies are also being put in place to increase clientele base and thereby, the companys earnings. The companys products will continue to be marketed under the brand name Rama.

Madras Fert

THE net worth of Madras Fertilizers Ltd (MFL) is fully eroded with accumulated losses mounting to Rs 206 crore against a net worth of Rs 175 crore. According to its Chairman and Managing Director, Mr Sukumar N. Oommen, the main cause for the company's downturn is the new pricing policy of urea, which is biased against MFL. The company is pushing for a change in the urea-pricing policy.

Following a presentation made by him to the Union Minister for Fertilisers, Mr Ram Vilas Paswan, last week, the Centre has recognised that the pricing policy was responsible for the company going sick. A shift in policy is necessitated if the company has to be retrieved from the BIFR, he said.

MFL is one of the public sector enterprises that was slated for disinvestment by the previous Government. The negotiations were at an advanced stage and the transaction documents were to have been circulated to the bidders. However, the situation has not progressed, and the present Government is yet to take a firm stand on the proposal. "For the present, it appears to be on hold," he said.

During 2003-04 the company, which has extended its accounting year by three months, has reported a loss of Rs 60 crore, he said.

MFL has come a cropper on statistics, the group-weighted average on which the urea subsidy is disbursed. Since the group-retention pricing for calculating cost of production of urea is based on production capacity, variable cost, conversion cost, depreciation and capital related charges, the company finds itself the odd one out in the group it is in.

MFL has made investments of about Rs 700 crore in 1993 and 1998 finds that the weighted average of depreciation allowed to it is Rs 280 a tonne of urea against its actual depreciation of Rs 885. It is losing about Rs 650 on every tonne.

The situation is similar on capital-related charges and the other heads on which the calculation of the cost of urea is based. Thus it finds its retention price does not cover costs since its cost of production is 20 per cent higher than the weighted average of other producers in its group.

Mr Oommen said that on the retention price alone, MFL lost about Rs 26 crore. But for the policy, the company would have reported significant profits. This is unfortunate for a company that reported a net profit of Rs 8 crore in the previous year, and has consistently improved its all-round performance in terms of productivity, energy cost and overall cost conservation, according to Mr Oommen.

As commercial banks have not taken into consideration MFL's financial requirements, the company is beset with a shortage of working capital, which in turn is adversely affecting its production capacity of complex fertilisers. The cash crunch contributed to a drop in the production capacity of its complex fertilisers, he said.

Member

regarding MFL you have not mentioned what the company wants to do to get out of the situation it is in. what are its plans? earlier two companies at least you have mentioned some big brother trying to pull up and give a breather. in MFL who is coming in to support? you believe Ram Vilas Paswan to revive it. It is another standard motor story.

New Member

Super Moderator

regarding MFL you have not mentioned what the company wants to do to get out of the situation it is in. what are its plans? earlier two companies at least you have mentioned some big brother trying to pull up and give a breather. in MFL who is coming in to support? you believe Ram Vilas Paswan to revive it. It is another standard motor story.

The company has plants in Karnataka and Madhya Pradesh and a grinding unit in Uttar Pradesh.

Mysore Cements plans to set up a greenfield 1.5-mtpa cement plant at Gulbarga in Karnataka, where the prospecting of deposits has been completed and core samples are being analysed.

Rama Newsprint

After acquiring the controlling stake in Rama Newsprint & Papers (RNPL), the SK Bangur group has chalked out plans to infuse a fresh lease of life into the company. The strategy entails expansion of capacity, streamlining operations, reduction in cost and improvement in quality.

RNPLs new promoters, the Bangurs, plan to double capacity to 2.5 lakh tonnes per annum of newsprint, writing and printing paper by installing one more machine within the plant.

The existing two machines will be upgraded with the swing facility allowing production of newsprint or writing and printing paper, as per market demand, said SK Bangur, chairman, RNPL.

Efforts are also on to set up a 25 MW captive power plant adjacent to the companys unit in Gujarat to help reduce the companys power bill by 20-25%. Total investment outlay is estimated to be around Rs 350 crore.

The Bangurs are in talks with overseas consultants and machine suppliers like Swedish firm Metso and Voith of Finland to lend a helping hand in the expansion exercise and cost cutting initiatives.

The company hopes to appoint a consultant shortly. Industry analysts feel the Bangurs may, in the near future, merge RNPL with the group flagship, West Coast Paper Mills (WCPM). Mr Bangur, however, refused to comment on the issue.

Having obtained the approval of the corporate debt restructuring cell for restructuring the Rs 432 crore debt liability and reducing it to Rs 210 crore, the Bangurs are busy addressing issues like mismatch in the companys finance and production. The shortfall in working capital requirements is being met by seeking term loans from lending institutions. Payment to non-CDR members has just been completed after several rounds of discussions, sources said.

Meanwhile, the groups in-house expertise has helped enhance production at RNPLs unit by 25-30% in the last couple of months.

Apart from quality improvement measures, marketing strategies are also being put in place to increase clientele base and thereby, the companys earnings. The companys products will continue to be marketed under the brand name Rama.

Madras Fert

THE net worth of Madras Fertilizers Ltd (MFL) is fully eroded with accumulated losses mounting to Rs 206 crore against a net worth of Rs 175 crore. According to its Chairman and Managing Director, Mr Sukumar N. Oommen, the main cause for the company's downturn is the new pricing policy of urea, which is biased against MFL. The company is pushing for a change in the urea-pricing policy.

Following a presentation made by him to the Union Minister for Fertilisers, Mr Ram Vilas Paswan, last week, the Centre has recognised that the pricing policy was responsible for the company going sick. A shift in policy is necessitated if the company has to be retrieved from the BIFR, he said.

MFL is one of the public sector enterprises that was slated for disinvestment by the previous Government. The negotiations were at an advanced stage and the transaction documents were to have been circulated to the bidders. However, the situation has not progressed, and the present Government is yet to take a firm stand on the proposal. "For the present, it appears to be on hold," he said.

During 2003-04 the company, which has extended its accounting year by three months, has reported a loss of Rs 60 crore, he said.

MFL has come a cropper on statistics, the group-weighted average on which the urea subsidy is disbursed. Since the group-retention pricing for calculating cost of production of urea is based on production capacity, variable cost, conversion cost, depreciation and capital related charges, the company finds itself the odd one out in the group it is in.

MFL has made investments of about Rs 700 crore in 1993 and 1998 finds that the weighted average of depreciation allowed to it is Rs 280 a tonne of urea against its actual depreciation of Rs 885. It is losing about Rs 650 on every tonne.

The situation is similar on capital-related charges and the other heads on which the calculation of the cost of urea is based. Thus it finds its retention price does not cover costs since its cost of production is 20 per cent higher than the weighted average of other producers in its group.

Mr Oommen said that on the retention price alone, MFL lost about Rs 26 crore. But for the policy, the company would have reported significant profits. This is unfortunate for a company that reported a net profit of Rs 8 crore in the previous year, and has consistently improved its all-round performance in terms of productivity, energy cost and overall cost conservation, according to Mr Oommen.

As commercial banks have not taken into consideration MFL's financial requirements, the company is beset with a shortage of working capital, which in turn is adversely affecting its production capacity of complex fertilisers. The cash crunch contributed to a drop in the production capacity of its complex fertilisers, he said.